Credit unions are well-known for promoting financial wellbeing and good money habits. Joining a credit union can encourage smarter money habits and help with long-term savings.
They offer great ways to save and there are different savings pots that can be used in addition to a normal savings account and this for some, is a real help in terms of managing their money. Many people struggle to differentiate what they’re saving for if everything is in the one account. A credit union can provide a savings account but also offer, for example, a Christmas saver. This means that one pot can be used for saving for the festive period and another can be used for a holiday or even just general savings for the future.
The motivation to manually transfer money into a savings account when your salary is paid can often be hard. This is why credit unions offer the facility of setting up automatic transfers from your salary the day that it hits your account. Some also offer an employer partner programme where an employee can opt-in to have a payroll deduction into their savings if they work for one of the credit unions workplace partners. This means that the employee will just take their salary that goes into their account and the saving is already done.
One of the main habits that credit unions are trying to encourage is that even if you have to borrow money, you still save at the same time. ‘Save as you borrow’ is a great initiative that allows members to takeout loans, pay them back and save a little at the same time. What happens is, if a member borrows money from their credit union then they will pay back a portion every week or month but some of this goes into a savings pot.
In a survey of 1,272 members from 7 credit unions, 71% who used ‘Save as you borrow’ decided to save more regularly throughout the year (fairbanking.org.uk). This proves it is a great way of encouraging people to save but also a good way of motivating those who have perhaps never saved before to start doing so.
Starting small is often better than going straight into saving large amounts as this can be daunting and leave you with very little left.Saving a small amount each week or month will help members reach their goals in2019 and beyond whether it be saving for a summer holiday, Christmas or even for a rainy day.
